Baidu Layoffs Hit Up to 40% of Workforce Amid Q3 Loss

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This week, Baidu started massive layoffs across multiple departments after reporting a massive financial loss. 

The layoffs, which began this week and are expected to continue through the end of the year, mark one of the company’s largest workforce reductions in recent times.

Baidu Layoffs May Cut Up to 40% of Its Workforce

Baidu hasn’t officially announced the exact number of layoffs, but some teams are seeing cuts as high as 40% of their workforce, according to people familiar with the situation.

Baidu has implemented these major staff reductions across its Beijing, Shanghai, and Guangzhou offices. The company’s Mobile Ecosystem Group (MEG) is bearing the majority of the cuts.

Affected employees are receiving compensation packages that include one month’s pay for each year of service, plus between one and three months of additional salary, according to employees who spoke about their severance agreements.

One employee in Beijing shared that 4 out of 9 people on their team received severance notices this week.

The key reason behind these layoffs is losses. Baidu lost 11.23 billion yuan ($1.59 billion) in the third quarter of 2025.

But the losses weren’t the only bad news. Baidu’s total revenue dropped 7% compared to the previous year, and its online advertising revenue plummeted as well. This marks the second straight quarter of revenue decline for the search engine giant.

Baidu’s traditional search engine and advertising business have been losing users and money for a long time. 

People in China are spending more time on social media apps like RedNote and ByteDance’s Douyin (the Chinese version of TikTok) instead of using search engines.

Baidu’s total workforce stood at 35,900 employees at the end of last year. The company has been steadily shrinking for years.

Baidu is Behind in the AI Race

Baidu was actually the first major Chinese tech company to launch a ChatGPT-style AI service back in 2023, called Ernie Bot. Being first should have been a huge advantage, like being the first person to discover a great new video game before it goes viral.

But being first didn’t guarantee success. Baidu’s Ernie is behind ByteDance’s Doubao with 157 million monthly users, and DeepSeek with 143 million monthly users.

The company that was once called “China’s Google” now finds itself struggling to compete against newer rivals.

Despite spending years and billions of dollars investing in AI, Baidu’s efforts haven’t revived growth. The company has tried different strategies, including making Ernie open-source earlier this year, but nothing has helped it regain its early lead against competitors like Alibaba and DeepSeek.

Baidu’s step may serve as a warning to other companies in China’s tech ecosystem.

Bottom Line

Sources familiar with the layoffs at Baidu said that roles tied to AI and cloud computing will largely be protected, with more resources being directed to AI development.

The company previously stated that over half of its mobile search result pages now feature AI-generated content, highlighting its efforts to modernize the user experience.

This means that employees working on traditional mobile services and advertising-related roles are at risk, while those in AI and cloud are somewhat insulated.